Grant Pattison, who has been Edcon's chief executive since February, yesterday embarked on a charm offensive to announce the company's decentralisation strategy.
Pattison said the group’s financial services and credit business was key to leveraging Edcon’s 14million loyalty customers.
He said the group boasted nearly 4million account holders as well as one of the largest insurance sales businesses in South Africa.
“We are now focusing on running the business properly. What we are not going to do is to use the credit and financial services business to make Jet, CNA and Edgars better businesses,” the former Massmart chief executive said. “They are going think of themselves as cash businesses with a close cousin that gives financial services,” he said, adding that the credit would not be increased to improve sales in the group.
Pattison said although Edcon was not in financially good shape after struggling with high debt, it had stabilised.
He said the group previously had problems worth billions of rand but these had now been reduced.
“These days we still have problems, but they are more in the hundred million. What you can conclude is that Edcon is not finally through this, but it is in a better position than it was a few years ago,” Pattison said.
Edcon was taken over by its creditors following a $1.5billion (R17.94bn) debt-to-equity swop in 2016, which reduced a significant chunk of its debt.
This equity swop meant that Edcon’s owners since 2007, private equity giant Bain Capital, ceded control after paying R25bn for the acquisition of the company, which has lost market share to its competitors Truworths, Mr Price and Foschini.
The new owners are banks and secured bondholders, including Franklin Templeton, Sanford C Bernstein in New York and Harvard University Pension Fund.
Jet stores chief executive Urin Ferndale said the company had bled customers but was now focused on retaining the existing ones and dominating the adult clothing business, among others.
Jet is competing with Steinhoff Africa Retail (STAR) subsidiaries Pep and Ackermans as well as JSE listed Mr Price.
- BUSINESS REPORT